The verdict on the U.S. Federal Reserve's quantitative easing program, including part 2, or QE2, will not be rendered for years. It may be longer, given the many areas of financial and economic policy the program has touched.

Anyone who says they definitively and incontrovertibly know QE2's long-term impact is not being genuine: many more data points have to occur to judge, for example, how QE2 affected banker lending psychology, let alone its impact on the U.S. economy.

That said, we can glean clues and insights by looking at current conditions, and one short-term data point reveals that since Fed Chairman Ben Bernanke disclosed the implementation of QE2 on August 27, the S&P 500 is up 17%, Bloomberg News reported Friday.

The Federal Reserve Open Market Committee stated, again, that interest rates will remain low for an extended period of time and that quantitative easing will continue with the "purchase $600 billion of longer-term Treasury securities by the end of the second quarter of 2011, a pace of about $75 billion per month." Thomas Hoenig again voted against the FOMC policy.

The FOMC left its options open for the future and gave no specific guidance as to what actions it will take when QE2 ends next year.

The world of international finance is a complex web. The U.S. is still the powerhouse when it comes to gross domestic product. Yet, while perched on top of the heap, the U.S. faces major problems with high-level debt and unemployment.

The U.S. Federal Reserve is faced with having to issue massive amounts of debt just to keep pace with the growing deficits. Now the Fed is planning another round of stimulus by buying more treasuries, dubbed QE2.

While the market deals with the recent news that August housing starts hit a four-month high, most investors and analysts will remain focused on this afternoon's announcement from the Federal Reserve Bank.

The central bank will announce at 2:15 PM if it has decided to take any steps toward kick-starting economic growth. The main vehicle for such a kick in the market's pants is quantitative easing, which is purchasing government bonds in order to add more money to the system.

The U.S. economic recovery is now proceeding at an anemic pace, a 1.6% GDP growth rate in the second quarter. And to top it off, certain analysts are arguing "the Fed is out of ammunition" and that means a double-dip recession is ahead.

Well, you can consider "betting" against the Fed, and assume even worse economic conditions are ahead, but before you do, contemplate the following:

• The Fed has already signaled that it's not likely to decrease the size of its balance until it sees sustained evidence of substantial GDP growth, and an increase inf capacity utilization. The calculation here is that the Fed is going to increase its balance sheet, including the purchase of long-term U.S. Treasuries, putting even more downward pressure on long-term interest rates.

The New York Federal Reserve Bank announced Monday that the Empire State Manufacturing index dropped to 19.1 in May from 31.9 in April. This drop suggests that the pace of growth slowed during May, with new orders and shipments dropping (although the benchmarks managed to remain in positive territory).

Why are we interested in the Empire State Manufacturing Index? Many economists consider it an early indicator for what will happen with the May edition of the Institute for Supply Management's national manufacturing survey that is due out in two weeks.

Big Ben Bernanke is letting his opinions be known early in 2010, and he is pointing the finger of blame for the economic crisis right at weak regulation. Bernanke is waiting for confirmation of his second term as Fed chair and he is looking for greater regulatory authority from Congress.

Bernanke told the American Economic Association that "Stronger regulation and supervision aimed at problems with underwriting practices and lenders' risk management would have been a more effective and surgical approach to constraining the housing bubble than a general increase in interest rates." This statement was part of Bernanke's response to accusations that the Fed was a major contributor to the financial crisis. The Fed head believes that the interest rates set by the Federal Reserve from 2002 to 2006 were appropriate.

Last year saw one of the biggest stock rallies in history. Last year also saw bond yields fall by 3.72% on average. Investors who ran to the bond market for safety in 2008 and early 2009 saw their investments drop, while the risk takers who bought stocks are sitting pretty.

All of this was happening while the Federal Reserve sold $2.11 trillion of notes and bonds. The market was supported by the Fed's purchase of $300 billion of the $2.11 trillion in notes, bonds and inflated-related securities. Foreign demand was strong. Indirect bidders, who include foreign buyers, bought 45% of $1.1917 trillion in U.S. notes and bonds, up 29% from last year.